Five real questions from export furniture buyers on payment, shipping and logistics terms, answered on this date and archived here once the next day's set went live.
Yes, an LC adds issuing, negotiating, and confirming bank fees on both sides, typically costing more than a straightforward wire transfer. For a first-time or large order, that extra cost often buys worthwhile assurance that payment only releases once shipping documents are in order; for a repeat, trusted supplier relationship, a wire transfer against agreed milestones is usually simpler and cheaper.
FCL (Full Container Load) books an entire container for one buyer's goods only — generally cheaper per unit for large orders and faster since there's no consolidation step. LCL (Less than Container Load) shares container space with other shippers' cargo, suiting smaller orders, but is usually slower and carries some extra handling risk from the consolidation and deconsolidation process.
Under FOB terms, the buyer takes on responsibility for freight and insurance once the goods are loaded at the origin port. Under CIF terms, the seller arranges and pays for freight and insurance through to the destination port. Confirm in writing which term applies before production starts, since it changes who bears the cost and risk during sea transit.
A straightforward item usually takes a couple of weeks to produce a sample, plus whatever time it takes to ship a physical sample to an overseas buyer for sign-off; a complex custom design can take longer. Build this lead time into the overall project schedule rather than assuming production can start the moment a quote is accepted.
Yes, phased shipment is common for large or multi-building projects. Confirm packaging, customs documentation, and payment terms are set up correctly for several separate shipments rather than one single consignment, since each shipment needs its own complete set of export documents.